What is ROI and Why is it Important?


ROI stands for Return on Investment, and it is very important to understand when you are making an investment whether it is in terms of training, capital or equipment. Whenever you plan on investing in a new project, it is vital that you understand what return you will receive for your investment. The return can be a straight forward monetary return (i.e. costs saved or revenue generated), or can be what is referred to as a ‘soft’ return. Soft returns are the more intangible benefits from an investment, such as improved productivity, higher levels of client satisfaction, time savings or even knowledge retention. More and more organizations are taking these soft returns into serious consideration alongside the direct financial returns when evaluating new projects.


SkillSpark offers an ROI Calculator to assist you in understanding the ROI associated with your e-learning project. This Calculator allows you to compare the ROI between two types of training (for example e-learning, and instructor-led training) and takes into account many of the often ‘hidden’ costs associated with a training program.



What is TCO?


TCO stands for Total Cost of Ownership, and has become an important measure in evaluating technology investments. The TCO is the total cost of a technology solution throughout its life, from initial purchase and implementation, through use and maintenance to the disposal or retirement of the solution. The aim of TCO analysis is to identify, quantify, and ultimately, reduce the overall costs associated with ownership of technology solutions. It includes 'hard' costs such as the purchase price of the asset, implementation fees, upgrades, maintenance contracts, support contracts, and similar costs. These costs are considered 'hard costs' because they are tangible and easily accounted for. Even more significant in most organizations however, are the 'soft' costs related to management, support, user training, hidden costs, downtime, and eventual migrations and retirement of the solution. Because these costs don't occur at acquisition time, they are often overlooked in budgets, resulting in unanticipated costs.


SkillSpark offers an TCO Calculator which is designed to assist you in understanding the different TCO’s between Hosted (Software-as-a-Service) e-learning solutions and client-server e-learning solutions (i.e. those installed on the client’s own server).



Want to Know More About ROI and TCO?


Are you interested in learning more about how you can assess the Return on Investment and the Total Cost of Ownership of your e-learning solution? Contact one of our eLearning specialists!


SkillSpark also offers in-depth Needs Analysis services to assist you in understanding how e-learning can be best applied to the unique circumstances of each client in order to maximize the ROI and provide the lowest TCO possible. Visit our Professional Services page to learn more!